* SSEC -0.6%, CSI300 -1.1%, HSI -0.3% * HK->Shanghai Connect daily quota used -3.6%, Shanghai->HK daily quota used 2.5% * FTSE China A50 -1.4% BEIJING/SHANGHAI, March 31 (Reuters) - China stocks fell on Wednesday, led by losses in material and property shares, as investors shrugged off data showing manufacturing activity expanded at the quickest pace in three months in March. ** At the midday break, the Shanghai Composite index was down 0.61% at 3,435.46 points, while blue-chip CSI300 index fell 1.1%. ** Property and material shares led losses in the morning session, with the real estate index down 2.08% and the material sub-index down 2.73%. ** Shares of Chinese developer China Vanke Co fell 4.8% and dragged the real estate sub-index lower, as analysts cut their earnings forecasts after the company’s annual results. Its Hong Kong-listed shares fell 6.4%. ** The pullback in stocks comes after a recent three-day rally boosted by corporate earnings, with northbound outflows via the Stock Connect hitting 6.6 billion yuan ($1.01 billion) on Wednesday, according to Refinitiv data. ** On the economic front, the official manufacturing Purchasing Manager’s Index (PMI) rose to 51.9 from 50.6 in February as factories cranked up production after a brief lull during the Lunar New Year holidays, with improving global demand adding further momentum to a solid economic recovery. ** The start-up board ChiNext Composite index was weaker by 0.62% and Shanghai’s tech-focused STAR50 index dipped 0.23%. ** Chinese H-shares listed in Hong Kong fell 0.4% to 10,976.96, while the Hang Seng Index was down 0.31% at 28,488.81. ** Around the region, MSCI’s Asia ex-Japan stock index slipped 0.08%, while Japan’s Nikkei index was down 0.64%.